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 Clare Short
It was the Seattle Meeting in 1999 that brought the World Trade Organisation to public attention. There were massive demonstrations uniting trade unionists, environmentalists and development organisations. The demonstrations turned to violence and the meeting ended in failure. Many people concluded that the World Trade Organisation was driven by commercial interests and cared nothing for the poor or the public interest.
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WTO summits often attract anti-capitalist protests across the world
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The general disquiet about the unfairness of international trade rules and the levels of poverty and inequality in the world is amply justified. But the answer is not to scrap the WTO. We need a system for making new rules where all countries can be represented and the poorer countries are able to combine to demand a fairer deal. This is what the WTO is for.
After the terrible economic depression of the 1930鈥檚 which led on to the second world war, the world learned some painful lessons. There was a new understanding that the depression had been caused by each country responding to recession by throwing up trade barriers to protect its own markets, thus driving recession ever deeper. This led to the creation of the General Agreement on Tariffs and Trade and eight rounds of trade negotiations which gradually lowered tariffs on manufactured goods and encouraged global trade and economic growth.
The WTO was created to replace the GATT in 1994 at the completion of the Uruguay Round which widened trade agreements to include trade in services (now 60 per cent of global output, 30 per cent of employment and 20 per cent of global trade), rules for the protection of intellectual property and also opened for the first time the questions of the massive distortions in agricultural trade created by rich country subsidies. The WTO is a membership based organisation - 148 countries now in membership and more preparing to join. It makes decisions by consensus and the rules apply equally to all.
There is a disputes settlement procedure which can be invoked by any country or group of countries if others are breaking the rules. It is not of course perfect. Rich countries have bigger delegations, more expertise and more clout but it is the most democratic international institution that exists. There is no Security Council or vetoes for big countries, it is one country one vote, not votes according to economic strength as in the IMF and World Bank. And decisions are made by consensus and apply equally to all. The reality is that if the WTO broke up, the rich countries would be able to use their economic muscle to negotiate bi-lateral and regional trade deals. And the poor countries would be unable to combine to demand more justice in trade rules.
Following the failure in Seattle, the WTO met again in Doha in November 2001 shortly after September 11th. At that stage the world was united in a determination to co-operate to deal with the new threat and this increased the determinations to launch a trade round dedicated to making trade rules fairer to developing countries. The meeting agreed an Agenda for a round known as the Doha Development Agenda. There are various issues on the agenda - clarifying the intellectual property agreement (Trips) to ensure poor countries can access crucial medicines in public health emergencies, special arrangements to enable poorer countries to adjust to rules and agreements (special and differential treatment), clarifying the interface between international environment agreements and trade rules etc.
But at the core of the agenda is agriculture. The poorer countries and poorest people are largely dependent on agriculture to make their living. And present trading agreements are grossly distorted. The rich countries spend over $300 billion in subsidies for their farmers. This is six times the value of world aid and equal to the annual gdp of Africa. It costs every household in the OECD countries $1000 p.a. It gives us expensive food and overproduction. We then subsidise exports to poor countries and sell our surpluses at below cost price so that many of their farmers are driven out of business.
On top of this, we impose very high tariffs on processed agricultural goods so that poor countries cannot add value to their agricultural production and most of the processing takes place in the rich countries. And 75 per cent of the subsidies go to very rich farmers. The rhetoric about our need to protect our small farmers is totally misleading.
Cancun is a meeting of Ministers to take stock of progress in delivering the Doha round. Prior to Cancun, progress was had but the approach of the Ministerial meeting led to last minute progress on clarifying the Trips agreement to make drugs accessible to the poorest countries and on some special and differential treatment issues.
In Cancun the biggest new development is the coming together of a powerful block of developing countries including Brazil, South Africa, China and India uniting with traditional food exporters like Australia and New Zealand to demand progress on agriculture. This new alliance provides a powerful counterweight to the might of the US and EU.
Cancun will not finish the round. The meeting could break down and leave the WTO in serious trouble or it can move forward and give instructions to the ambassadors who negotiate in Geneva to progress the detailed negotiations to reach agreement by the end of 2004 which is the target date to complete the round.
The luxury holiday resort of Cancun is a long way from the lives of the 1.2 billion people who still live in abject poverty. But what is taking place in Cancun is crucial to their future and the prospects of a more equitable world order.
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